Mr Ugochukwu Chime, President Real Estate Developers Association of Nigeria and President Enugu Chamber of Commerce, Industry, Mines and Agriculture, bared his mind on the state of Nigeria’s economy, positing that President Mohammadu Buhari must embark on a forensic assessment of key sectors of the economy in order to come up with a new economic master plan. Excerpts:
The nation’s economy doesn’t seem to be in the right shape at the moment. What in your view is the way out?
The nation’s economy is in shambles for very many reasons; some are internal while some are external. The first thing we need to do is how do we manage the change, how do we come out of the problem. I believe there is ability in every disability, it’s a challenge and such challenge is to look inwards collectively and ask ourselves, why did we get here and how do we walk out of it. Looking at the nation’s economy, the immediate situation that led us to where we met this challenge of not being able to pay for the services we have as a nation. We’ve had about 50 Per cent drop in our income as a nation. It’s because there has been a fall in oil price. The global economic situation, the global communication network that we have has made it clear that we now operate in a global village and therefore the set of standards, the competences required to manage what you do in your village must be at par if not better with global standard. Whatever line of business you are operating in as a person, you realise that your competitors are not just those operating within your geo-political location, but there are those outside your location because the cost of transaction needs to be at par with your own or your own may even need to be better than theirs. So we as a country have not looked outside Nigeria, how did other economies manage their petro-dollars, how did they invest in other areas, what did they do, what are the components of their GDP; what are their niche areas that they developed which would give them comparative advantage over others. Where did they invest their money in impact investment such that when they consider basket of issues, to the point that they said this investment has to impact in such a way it will bring about employment and economic inclusiveness. Those are the parameters that they used to assess how they do business and these are why some countries decide to concentrate on certain areas where they have comparative advantage. We never did that, we backed off and relied on oil, that is what we have now and there are a couple of other factors and any war raging between Russia and United States, whether they are fighting with armaments or they are fighting with oil, to make sure they pump out shell oil, in order to bring down economic power of Russia to prosecute wars in Syria and the rest of them will affect us as a collateral damage.
So, some of these collateral damage were not aware of some of the impact of this global economic wars going on. Consequently, we fall prey to that war; we became the grass that suffered. Internally, we’ve not recognised certain facts; there are basic human needs, food, clothing and shelter, the more you service the demand factors of man in that area, the better you have returns because man will opt for those core areas first because they are basic needs. Now, we have failed to invest in those basic needs on the sustainable level namely agriculture and housing. If we have had a consistent policy of enhancing those sectors, not enhancing them on the altruistic IMF policy of remove your hands from every sector, don’t subsidise every sector. It’s a lie because in their own countries, they still subsidise, they subsidise those economies. So, we bought into a falsehood, a false prediction and prescription from the Britain-Wood Institutions, IMF, World Bank. As at today, when there was crisis in the economy of the United States of America, what Obama did was to invest, subsidize housing production, that’s why today, in America, housing contributes up to 60% of their GDP, Agriculture contributes another huge portion; in South Africa, Housing contributes 30% of their GDP, in Nigeria, Housing contributes 0.5% of our GDP. We cannot reinvent the will, these are the sustainable areas. When you build an estate for instance, one house according to former Finance Minister, Ngozi Okonjo -Iweala, with one Housing unit you construct, you have created seven to eight jobs, you’ve also created an internal revenue source for either the state or the local government on a perpetual basis; it’s not like a factory that folds up, that house is there, that is why in these economies, they contribute 60% like in the USA. The core question is how are we dealing with these since we failed to deal with them, because we failed to create this and have proper road map, a proper policy direction with all the necessary legal infrastructure, with all the necessary physical Infrastructure, with all the human development infrastructure that will ensure sustainable development of these need areas of man, of Agriculture and Housing, that is why we have fallen to where we are. Therefore, the road map should be, let’s get back to the basics and not on an emotional level, we are on a roller-coaster. I remember a paper that was delivered by Prof Okwudiba Nnoli of the Department of Political Science, University of Nigeria, in 1984 titled Musical Cheers and Cheers for the Music. Incidentally, it was the same time that we have Muhammadu Buhari as Head of State. People like to tell people what they want, some of us are praying earnestly that this president who was elected, not because he is a member of any party but because the pro-literate, the poor masses love him and they believe in his personal character. They want to see him live what he speaks. Because of that, millions of people kept following him to any party he goes to; whether it is ANPP, CPC, they were with him, they believed in him. He must come to terms that whether he likes it or not, the voice of the people which he is carrying must come into the board-room of decision making and not be shut out.
And the only way those voices would come into the board room of decision making is that in any time, whatever we do as leaders, we must remember that these are the ones we are serving, the political class comes and goes, we must not be carried away by the various sub-divisions and those in pursuit of selfish interest and party spirit that takes place within the polity and among the super-rich. We must get down to looking at the pro-literate, the poor masses, the talakawas and find out that they need three things. They need food, they need clothing, they need shelter. How do we begin to change our economic master-plan to provide for them. Why we are pursuing making sure that we have strong institutions that have proper governance in place, eliminate corruption and all the other challenges that we have, that built over the years, we must ensure that the voice that put the present government in place, that we prove to them that they have not been over-looked and that we are moving in the right direction to their being considered as a vital policy inputs in all that we do, otherwise, by the next four years, 2019, if they lose hope in the current government, am not talking about APC, PDP, if they lose hope in President Muhammadu Buhari, this country will go into a tail spin because they will look in the horizon and ask, who else can we trust after we have trusted such a man who had lived out his life in what we speaks. The crisis of confidence that it will generate will be more monumental and devastating that the current economic stress that we have. There will be socio-political challenges of hopelessness that will envelope the nation. I hope it will never occur.
Some people think our present predicament stems from the fact that we don’t have political direction
I think the issue is not political direction. The issue is more of the people around him not believing in what he believes in. The average politician, forget about whether it is APC or PDP, it is the same set of people moving back and front, he must know that he’s different. The greatest thing he would have done for this country is to look inwards, he has lived for almost 80 years, he knows the people across the country, no matter which party they belong, that can help him deliver the goods but above all, he must believe that there are still good people in Nigeria, that he is not alone, in which case that will strengthen his heart that he can carry the battle forward. The battle is not against PDP or previous regimes, the battle is against the pervasive and the very enduring corruption tendencies that is in all of us and our resistance to change, both the led and the leadership. Today, we know that the price of electricity has increased, we are asking the leaders to do something about it, to tighten their seat-belts, to make adjustments but as Nigerians, we have not made adjustments in putting off the fridge in our houses when we go to work. Buhari understood the situation in 1984, that was why he came up with War Against Indiscipline but the good thing then was that he had a command structure for him. The problem now is that the rat has grown bigger and the resources to tackle that rat has grown smaller; he doesn’t have the command structure of the military to do what he has to do. But the way forward is for him to understand that corruption is not personalised for anybody or group of people. Corruption is a system and am sure that with the type of thing that happened in the budget process, he would have seen now that corruption is more endemic and more persevering that he may have ever thought about and in the sobriety of that reality, some of us are praying that he will not give up but that he will continue to look inwards and that we’ll give him time. As these things are dawning on him, he must look forward at finding himself focusing not on the challenges but on the people he has come to serve and ask how do I serve them, how were they served in other climes and countries, how can I make the necessary changes, he may not solve all the problems but he must put enduring legacies in making institutional reforms in the way we do things. Its not in the fruits of the tree but how does he plant enduring legacies the way we do things. We have decided to move away towards privatisation and commercialisation, what does it mean. Are other countries practicing it the same way, do we chose and pick where we do privatisation and commercialisation or must we look in or its privatisation and commercialisation another name for removing the safety nets that are available to the poor that voted him into power; are there ways we can ammend the cutting age of that privatisation and commercialisation in such a way that we’ll have good control mechanism that will limit the powers. He has done very well like the case of MTN, we need to move forward and ask ourselves, how do we make sure that these special interests do not overwhelm the country because they are very well armed financially and contact wise.
The government has spent more time in the past eight months fighting corruption while relegating most of the campaign promises to the background. What’s your take on this?
I don’t know the proportion of time he puts into fighting corruption but I still think that corruption must be fought to leave a signal to even those who are with him today that we cannot go on doing business like this anymore. If some of the things we are hearing are true, I think it is damaging and should not be allowed to go scot-free. We must have to start somewhere to say enough is enough. Having said that, the more enduring corruption is not stealing of money, there are more enduring corruption in terms of policies that are very terrible for the growth of our economy,. There are processes that have not been touched that are not in tandem with what we need for this country to move forward. In so far as they are there, they are corrupting whatever moves he makes to change the country; whatever policies he brings on board are affected by these things, part of the things he needed to do while pursuing corruption or those who stole our money is to do a forensic assessment with key stakeholders of the way we do things in our institutions. When that analysis has been done, we’ll discover what we need to do. One important area of that forensic analysis is that he must eliminate the we versus them mentality which has made it very difficult for the poor masses to be part of decision making. I give you few illustrations. Many government establishments do not have the stakeholders who are involved in that industry as part of the board of the corporations. That is a systemic corruption on its own and it’s very damaging. I give you an instance maybe from the sector I operate. We have Federal Mortgage Bank supposed to be funded by 2.5% from workers and 10% of the loans portfolio from banks and 20% of portfolios from insurance companies apart from life premium and then some funding from federal government. Federal government has on that board staff of Central Bank who are part of the Governing Board, Federal government has refused to put money there but every year, Federal government appoints people into the board of the bank, nobody from the NLC is there or representative of the labour. Nobody from the TUC is there yet it’s their money. Federal government has refused to put money into the bank but you appoint those from Aso Rock who will manage other people’s money and they manage it anyhow yet the intention, nobody has ever sat down to ask that there is a breach of this law. Where are the 10% from the banks, where are the 20% from the insurance companies; over the years, that’s why I said he must look at the poor masses and ask why are they not getting their dues. Why will somebody sit down there and appoint people to go and mange other peoples’ money without making any contribution. Every year, we have about 28 to 30 billion naira contributed by workers and that money is being used to pay Executive Directors, staff of the bank and the houses are not been built. If the workers today demand their money back, it will not be available anywhere. This is replicated in other sectors. Globally, there is no country with such a scheme that does not do a matching grant. If workers contributed 30 million every year, you are meant to match that money at least for the next 10 years. If government decides that whatever amount of money the workers contribute, we will match it twice every year to encourage this scheme to stand, let us put on board of the mortgage bank, or any other institution, may be agriculture, people who are stakeholders, you don’t need to populate it with political party people as have been the case, it will not work. This is a forensic appraisal that is shouting. Two, at the various levels, the way we do business, we have continued to do it the same way, we say we are privatising but we have gone back. The Federal Housing Authority was set up during the military to build houses that are not expedient and profitable for the private sector to engage in, that is houses for the poor, the state housing corporations were set up to do the same thing. For the past 15 to 20 years, that has been annulled. They are now building for the rich who can afford to build their own houses. FHA is no more building for the poor, the state housing across the country is no more building for the poor, that is corruption of the policy they were set up to carry out. He should look at that corruption too. You cannot use our money to set up an institution supposed to provide housing for the people and that institution is providing houses for the upper 10% and you say that is not corruption, it is corruption. We will look into and find out where are we and how do we need to move forward so that while pursuing how to retrieve our funds which we will use for development, we will also make sure that fresh funds are not lost because of systemic disequilibrium, the set up of this institutions or in their vision statements that have been corrupted over-time. These institutions that were set up to serve the poor in various areas having been misdirected. Workers contribute 7.5% for the pension fund, their employers contribute 7.5%, the whole of that money contributed running into about 5 trillion today are no more being use to provide those services that the poor needs, they are now used to go and service interest of the rich. They are provided as loans, they are provided there in the Nigeria Stock Exchange where they can go and access it, the rich gets richer and the poor gets poorer but the money is the contributions of the poor through the pension fund and you come back to return it to them 15 years after when the purchasing power of that money is 20% of the original value. What is correct is that we should as at now find a way to make sure that a percentage of it is directed towards providing services; whatever are the impediments in terms of the various institutions that will do them, we restructure them. If there is a challenge in those processes, you restructure them. We don’t throw away the baby and the bath water, we don’t become emotional about a challenge. In the case of the CBN, they have two directors in Federal Mortgage Bank, every year they are appointed and they sit down there, you are sitting on the board, CBN, you have control, you are sitting on the board, the bank is answerable to you, you have not been able to restructure it enough to invest money there for the poor masses. Haba, there is a problem.
Clearly, there is need for government to diversy but looking at the budgets by most of the states, they seem to be more interested in tasking the poor instead of diversifying. How are you looking at the issue of double or multiple taxation?
Many factories have closed up and so many others are going to close up because the perception is that the private sector is making so much money and as such should be taxed more, that’s very wrong. We have complained, we have written, after some time, what some of the companies did was to sell off and then move into other areas. Some have gone out of some states, there are some competitions going on now within some states even though some state governors are not aware of. Some governors who are very innovative have created more enabling environment so I can freely move my factory from where it is located and go to a state where the environment is more conducive for me to start producing. And we have been telling some of them from this area that there is a stiff competition going on. How can we make it better, how can we talk more, the state governments should be having quarterly meetings with the captains of industry because we are working for them. We are giving employment to the masses who they swore to look after, we are paying tax, those workers are paying income tax, we are their partners, our wellbeing will mean their own wellbeing, if our factories close up, if our businesses close up or taxed out of existence, then we’ll all be worse off for it, there will be no more factories to tax, when you kill all the businesses through multiple taxation and through agbero taxes which thankfully enough, the governor of Enugu state has stopped because in the last administration, we had terrible situations with thugs who invade offices and shopping malls as if we are criminals. We’ve engaged them, can we talk, we know your problem, you need more money and we are here to assist, the money will come when we work together, create an enabling environment of prosperity for all of us, we need to be partners in progress, we are presently using the wrong set of values in addressing the problem we have, we have gone on foreign trips to come and bring investors, how many of them have come, none. Because the first question an investor usually asks is how are the local people operating, what is the cost of doing business, what is the business environment like, what is the transaction cost and transaction time required to do business in your clime and when they do their profiling, when they do their due deligence, they find out that your environment is not okay, so no matter when you visit them a million times, it won’t work, you need to come down and create enabling environment. Secondly, some of them need to have local partners who will cut down their risks; risk to their lives and other risks. No other country has ever travelled to Nigeria without their captains of industry being part of their delegation, they never do that. Its only in Nigeria that a delegation that goes to source for investors go only with government team without the private sector. It’s an anomaly that we need to correct if we must do things properly.
ECCIMA is coming up with this year’s trade fair, what are you bringing on board this time around?
We now have an Enugu Free Trade Zone that’s about a year old, we now have international airport, we are trying to make Enugu a destination of choice in terms of business. We are trying to discuss with the governor, can we have a one-shop-shop that will stay under the ministry of Trade and Commerce where every investor can receive information on all that you need to do business in Enugu state and to keep on having business, what are the tax platforms that you have, what are the incentive platforms that you have, we will need to sit down together as a chamber and get these information and pas it through the medium of chambers of commerce worldwide. That is a veritable tool that we are trying to engage in now. Another aspect is competency enhancement among members. We discovered that their ability to change and see the global competition that we’ll have has not been there, we are educating our members, we are bringing about information, we are creating knowledge platforms, basically our approach is how to manage the change that we have seen and the problems we have seen. One is the element of change of mindset among members through education, advocacy and through sharing, through mutually beneficial discussions with stakeholders, government, the organised labour and everybody, the second one is to change the process of doing things so we can have a defined template with government and within government, defined template within the organised private sector so that when we start on a rout of trying to come up with business idea, you know how it will end having known the hindrances, the mitigation factors you can put in place, that is template. That is what I call the process review we are doing. The third element is the deployment of technology so that we can have real time information on these two aspects, we can have real time response to people because time is money and we have to keep our issues within the global technology. These are what we are deploying. The trade fair is not the chamber, it is only an aspect of the chamber, it is the face of the chamber but not the chamber, what we do behind in terms of interacting with governments, in terms of meeting people, in terms of easing processes are even more than 90% of what you see in the trade fair. So, we’ll keep the media abreast with these issues on quarterly basis. We will improve our relationship with government so that we’ll do away with the we versus them mentality, which has been prevailing over the years. That is what we are working on.
Source: ThisDay Newspaper